From the BBC:
According to the Reuters investigation, Starbucks generated £398m in UK sales last year but paid no corporation tax. In comparison, rival Costa recorded sales of £377m in the UK last year, and paid £15m in tax, or 31% of its profits...
YPP Treasurer and tax campaigner Mark Wadsworth said "So f-ing what? On net £398 million sales, they will have collected and paid over £80 million in Value Added Tax and probably half as much again in Business Rates (assuming they own their premises). We could double that for all the PAYE they collect and hand over, but then we'd have to make some sort of judgment as to how much of that is borne by the employer and how much by the employee, so let's just call it £120 million in round figures. Whether or not they paid any corporation tax is neither here nor there.
"And if they are tenants, then the privately collected taxes they pay - i.e. the location rent - is probably twice as much as the Business Rates which they'd pay as owner-occupiers. But their coffee is not as nice as Costa Coffee's."
A grim document
3 hours ago
15 comments:
Mark,
(I know the Costa figures aren't yours)
31% of £377 is £116M)
and
I read today that Starbucks did not pay the VAT.
CR.
CR, Costa first has to deduct all its expenses from turnover to arrive at taxable profits, which were (say) £50 million (a pretty good net margin) and then it pays corporation tax on that.
The notion that Starbucks does not pay VAT is absolutely fanciful, which nutcase said that?
Dunno.
I have been looking for a link. There was one on Twitter but I have lost it.
I'll see if I can find it.
CR.
VAT-able goods: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_CL_000118#P285_14849
Coffee, tea, milk drinks and (as far as I can tell) cold pastries are 0-rated. I suspect hot paninis will fall foul of the recent changes.
Which would you rather have?
1) More and better Starbucks branches
2) 5-a-day co-ordinators, useless, overpriced weapons for the military, people trying to get smoking banned in more places.
I'm not a big fan of Starbucks (my chain* espresso preferences are Nero, Costa, McDonalds**, Starbucks) but if it means they're spending money on opening more branches, then that strikes me as a far better public service than whatever government would do with it (probably more art installations).
oops... meant to say
* The best places for coffee I've found are Bar Italia in Soho and Monmouth in Covent Garden but not chains
** Whatever you think of McDonalds, their espresso is surprisingly good.
H, before you go spouting about VAT law you might actually like to brush up on the distinction between food (zero rated) and catering (fully VAT-able).
TS, I'd rather have 1) of course.
As a confirmed coffee expert, I'm amazed that you mention McD's .I've never been anything but bitterly disappointed with their coffee. But their food is good value and their toilets are excellent.
Did you have the filter coffee because my memories of that is that its nasty. But I find the espresso decent.
I don't like Starbucks. They over roast their beans, probably to make lattes tastier but it gives their espresso a burnt taste.
TS, I almost certainly did, I'll try the espresso in future. As to Starbucks, I have no opinion one way or another, all I can say is that they pay a massive wodge of tax in the UK.
Thanks for the pointer MW: I've updated my blog post accordingly. (This is clearly why I shouldn't be a tax advisor - reading HMRC web pages makes my eyes bleed).
H, and thanks for the link over at yours.
That VAT payment merely lowers the staff wages, so it doesn't matter much.
After all the BoE said that low wage inflation was a good thing...
SB, yes, VAT and NIC both have this effect of pushing down wages and creating unemployment. That's why the Homeys like them so much.
Labour Land Campaign now seem to be more public tax collectors than public rent collectors.
Go take a look at their recent post on this starbucks topic.
Captured by the high priests at the Tax inJustice Network.
Oh dear oh dear. Thos is what happens when we make compromises and give compensation. Complete failure.
RS, as it happens, the TaxAvoiders Alliance have just sent out an email whining about Starbucks:
"Endless scandals are leading to a breakdown in trust. Our tax system urgently needs serious reform so everyone pays no more and no less than their fair share."
As a general rule, if the TIN and the TAA agree on something, you can be quite sure that they are both completely wrong.
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